FX Today: Final inflation figures in the euro area take centre stage

The US Dollar (USD) retreated further on Thursday, clinching multi-day lows as investors continued to assess prospects for rate cuts by the Fed and the impact on the economy of a protracted US shutdown.

Here’s what to watch on Friday, October 17:

The US Dollar Index (DXY) extended its leg lower, revisiting the 98.30 zone, or multi-day lows, amid a deeper pullback in US Treasury yields across the curve and steady concerns over the consequences of a US federal government shutdown. Net long-term TIC Flows are next on tap, seconded by speeches by the Fed’s Kashkari and Musalem.

EUR/USD rose to seven-day highs and remains en route to retest the 1.1700 barrier sooner rather than later, always following the persistent weakness in the Greenback. The final Inlfation Rate in the euro bloc will be the salient event on the domestic calendar. Additionally, the ECB’s Donnery is due to speak.

GBP/USD added to Wednesday’s gains beyond 1.3400 the figure, challenging its interim 55-day SMA near 1.3460. The BoE’s Pill and Breeden will speak in an otherwise empty UK docket.

USD/JPY tumbled to seven-day lows, trading at shouting distance of the key 150.00 neighbourhood, down for the third consecutive day. The weekly Foreign Bond Investment figures are expected to be seconded by the speech by the BoJ’s Uchida.

AUD/USD extended its choppy trade, this time finding support near the 0.6470 region, down modestly for the day. Next on tap in Oz will be the speech by the RBA’s Jones on October 21.

WTI crude remained under pressure on Thursday, slipping back toward the $57.40 area per barrel, its lowest level in five months, as traders weighed reports that India may suspend imports of Russian oil. Geopolitical tensions helped limit deeper losses, but a larger-than-expected build in US crude inventories from the EIA added to the sour mood.

Gold’s rally remained intact on Thursday, with the precious metal approaching the $4,300 mark per troy ounce for the first time in its life amid geopolitical concerns, rising Fed rate cut bets and unabated uncertainty surrounding the US shutdown. Silver prices added to the ongoing uptrend and rose to a record high just over the $54.00 mark per ounce.